Legalizing Recreational Cannabis

Proposed Framework

The Government of Canada issued the most comprehensive roadmap
for legalizing recreational cannabis in the world.

The 112 page task force report has a considerable amount of discussion surrounding their recommendations to the government, but there are key recommendations we can focus on. It should also be stated that this force is only a series of recommendations – some (or many) may not be adopted into the new legislative framework; it will be to the discretion of Trudeau’s government, and also revised through the House of Commons discussions.

However, the general expectation is that the government will adopt the entire task force document recommendations. Essentially, they are proposing to adopt the current medical model of cultivation in terms of security requirements and quality controls. At present, in order to legally cultivate medical cannabis, a producer must follow very stringent security requirements (clearances, monitoring, theft prevention, storage), record keeping / inventory management, and very rigorous quality controls similar to the pharmaceutical industry. The facilities are licensed for production as well as sale (to end consumers via direct mail). The task force report has recommended adopting the same (if not very similar) standards for recreational production.

Another interesting recommendation is the allowance of outdoor cannabis farming in the name of “environmental stewardship”, given that indoor production requires a heavy amount of electricity and resources.

The task force has also recommended allowing the production and sale of different dosage forms, including edibles and beverages. While it is not yet clear if certain derivatives (e.g., isolated CBD) will be permitted, it is reasonable to assume some form of allowance for derivatives.

Perhaps the most significant step forward, however, is in the provision of storefront retail sales of both recreational and medical cannabis. While it is not yet clear what types of stores will be allowed to sell recreational cannabis, the task force has strongly recommended not allowing the co-sale with alcohol. A few of the Canadian provinces are strongly pushing to allow liquor stores to sell cannabis, but this has yet to be decided. For medical cannabis, the belief is that pharmacies (or hybrid dispensaries with a pharmacist on staff) will be allowed to sell medical product.

The retail component cannot be underestimated. While retail sales are “permitted” in various US states, by contrast, such storefronts are still federally illegal. The Canadian proposal is to provide a 100% legitimate retail business model for the sale of recreational cannabis. Such “pot shops” will be licensed by the federal government; they will also very likely be required to achieve additional licences from the provinces and/or municipalities.